Kildare closes maiden fund at $2 billion

Kildare Partners, the London-based private equity real estate firm led by ex-Lone Star veteran Ellis Short, has hit the hard cap for its first opportunity fund, concluding one of the quickest fundraises in the industry since the global financial crisis.

The firm raised $2 billion for Kildare European Partners (KEP) in a capital raise that took approximately six months from start to finish.

It is understood the firm had demand from institutional investors for another $500 million worth of capital commitments on top of that figure meaning a number of investors have been unable to get invested.

The clamour from investors to invest in KEP is understood to be based on a combination of a belief that Europe’s major lenders to commercial real estate borrowers are more willing currently to unload assets from their loan books and Short’s deal track record while at Lone Star in Asia.

The majority of the fund’s backers are understood to have come from Short’s native North America and many of them also were backers of Lone Star.

The fund has been raised to acquire real estate via distressed loans in Europe.

News of the final closing comes as Kildare completes its largest transaction to date: the acquisition of a €1 billion loan book called the Mars Portfolio, from Deutsche Bank.

The loan book contains debt behind 26 office and hotel assets in Germany. Its previous owner was Eurocastle Investment, the listed property company managed externally by Fortress Investment Group. Eurocastle originally paid €2.1 billion for the assets in 2007 from DB Grundbesitz-Invest, an open-ended fund managed by Deutsche Bank. At that point there were almost twice as many assets.

It was reduced in the years following, its financing was restructured and its ownership later transferred to Germany focused firm Arminius. Last year, it was placed into insolvency by Deutsche Bank.

Other Kildare deals to date include €100 million of loans from Lloyds Banking Group and 2 Park Street in London’s West End, which was bought for £52 million (€63.3 million; $88.2 million) from Danish pension fund Cording Danmerc.

Kildare declined to comment.